Following a failed attempt to break out from a long-term downward resistance line, EOS (EOS) is currently experiencing a short-term decline.
Since peaking at £12.4 in May 2021, EOS’s price has been dropping. The decline resulted in a low of £0.68 in June 2022. Since then, the price has been rising, hitting a high of £1.39.
The price is currently forming a lengthy upper wick in the weekly timeframe, with the upward movement failing to fully sustain.
Since it has broken out from its downward resistance line, the RSI is displaying some bullish signs. But it still hasn’t taken back the 50 line.
Additionally, there is critical resistance at £1.63. The long-term trend is not bullish until the area is regained and the RSI rises above 50.
EOS has been declining since May 2021 behind a descending resistance line, as seen on the daily chart. The most recent attempt at a breakout by the price has been made on August 18.
An eventual breakout could be on the cards because resistance weakens with each touch.
An inverted head and shoulders pattern indicates that a bottom has been struck.
The daily chart, however, suggests that an initial decline could take place before the breakout. The daily RSI, which has produced bearish divergence and is accompanied by the lengthy upper wick, is the primary cause of this.
In the case of a downward movement, the resistance line of the previous ascending parallel channel, which was formed at £1.5, would be the closest area of support.
According to the wave count that is most plausible, EOS has finished a five-wave upward movement starting from the bottom on June 18. The peak was made exactly at wave four’s 1.61 external Fib retracement level. The peak of wave five is frequently reached in this region.
The 0.5-0.618 Fib retracement support levels, which are located between £0.96 and £1.4, will serve as the primary support area if downward movement ensues. This also corresponds with the wave four’s bottom and support from the channel’s previous resistance line.